Judy puts Tokyo in a tight spot

Judy Sexwale is seeking access to Tokyo's company assets through the High Court in Joburg. Photo: Chris Collingridge

Judy Sexwale is seeking access to Tokyo's company assets through the High Court in Joburg. Photo: Chris Collingridge

Published May 26, 2015

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An apology to Tokyo Sexwale

In the report below it has since been pointed out that The Star was wrong to:

* “identify the Sexwales;

* “name Mr Sexwale as a participant in the case – he was not a party to it, nor was he represented in the proceedings;  and

* “refer to Mvelaphanda as belonging to Mr Sexwale, while, in fact, the family trust holds 25 percent of the shares. He is not a trustee.  

 

The Star and IOL also acknowledge that the photograph gave the false and misleading impression that the Sexwale couple were leaving court after or during the hearing on May 26 this year – neither of them was at court on that day.

 

The Star acknowledges that it misconstrued the fact that Acting Judge D Berger declined to make an order as permission to publish the names of the Sexwales.

 

The Star also apologises for its headline “Judy puts Tokyo in a tight spot on finances – She has subpoenaed his auditor”  (which was shortened by IOL), as it created the wrong impression that Sexwale was a participant in the court case. 

This matter was referred to the Press Ombudsman, whose full ruling can be found at www.presscouncil. org.za

Johannesburg - Tokyo Sexwale’s Mvelaphanda Holdings is holding on tightly to its financial statements, putting up a legal battle to fight a subpoena Judy Sexwale obtained to access the records.

Monday’s court battle was sparked by a subpoena Judy issued against Carel Steenkamp, whose firm has been in charge of auditing Mvelaphanda Holdings since 2005.

She wanted to determine the value of the 25 percent shareholding she believes is the “most valuable” of assets in the joint estate they should divide equally on the finalisation of their divorce.

Judy subpoenaed Steenkamp to hand over annual financial statements dating back to 2001.

But arguing in the High Court in Joburg on Tuesday, Advocate Brian Pincus, SC, urged Judge Danny Wright to set aside the subpoena as the company would be prejudiced if information about its trading strategies was revealed.

Chief to Mvelaphanda’s objection to the subpoena was that Judy disregarded legal procedure, electing to subpoena Steenkamp when she should have, in fact, subpoenaed Mvelaphanda Holdings.

“The fact is that this is the wrong route. If you subpoena the wrong person, it’s an abuse (of procedure).

“The fact that a person has documents doesn’t mean he’s got control or authority. The custodianship doesn’t vest in the auditor. He merely drafts the document,” Pincus said.

He argued that it was unacceptable for Judy to expect the company to hand over “documents spanning 20 years”.

“We are talking about truck-loads (of documents) here. It is time-consuming and imposes an unreasonable expense (on Mvelaphanda),” Pincus said.

Initially, the company also argued that the papers were irrelevant to the divorce proceedings, so Judy did not have to know the value of assets in the family trusts. In court, the lawyers conceded that Judy indeed had legal standing, but that it was not necessary for her to have them.

Judy’s Advocate, Chris Loxton, SC, dismissed the Mvelaphanda Holdings application as an “extremely baseless application meant to delay matters” in the Sexwales’ divorce proceedings.

“Mvelaphanda is the estate’s main asset. It’s very difficult to understand how various trustees would have performed their duties without understanding the financial affairs,” he said.

“Mvelaphanda says it’ll never supply the documents at all as they are requested for ulterior motives… to victimise the trustees.

“Then there’s the strange argument that ‘you should have subpoenaed us (not the auditor)’. It is not a genuine line of argument.”

Loxton also painted Sexwale as someone who ran Mvelaphanda Holdings by remote control despite having resigned as its executive chairman.

He argued that huge amounts of cash were randomly transferred between the Mvelaphanda Empowerment Trust and the two family trusts – the TJS Family Trust and the TJS Houghton Trust – as Sexwale “uses the Empowerment Trust for his lifestyle”.

Loxton said: “There has, over recent years, been a massive flow of cash between Mvelaphanda and family trusts to the extent that R150 million was transferred between 2011 and last year.

“On what basis could it be possibly said that when we want to say Mr Sexwale is ‘put money here, move it there… I want R3m to live on…’ how can that be considered irrelevant?” Loxton asked.

In her affidavit, Judy said while Mvelaphanda Holdings gave Sexwale R3m monthly, it had refused to give her money to pay for her legal costs, to provide three cars for her and each of her two children, and to pay for a holiday to Mauritius for her and her son despite having done so for the past 19 years.

“It is inconceivable that a wife who seeks an order declaring that trust assets should be declared to form part of her husband’s estate in divorce proceedings should be denied information about such assets.

“I’m entitled as a beneficiary of the trusts (to know the composition and value of their assets),” she said.

Asked by Judge Berger: “Why are trustees transferring such amounts of money, when Mr Sexwale is no longer a director (of Mvelaphanda Holdings)”, Pincus said: “I don’t know, because it’s not on the court papers.”

Judgment was reserved.

* Sexwale’s lawyers tried to get Judge Berger to bar The Star from identifying parties involved in Monday’s case, but the judge said: “I decline to make such an order.

“My understanding is that this matter has already received attention in the press. In fact, there are allegations that Mr Sexwale had asked that they be named (after The Star broke the news of their divorce in 2013).”

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